Corey Rockafeler | We can all agree, this is not your grandfather’s Small Business Administration. The SBA has been more assertive and preemptive in finding ways to galvanize small business lending . Adding a 25-year term to the SBA 504/CDC loan program is a major benefit to growing small businesses.
For business owners looking to finance big ticket items like real estate, office space expansion, or huge equipment purchases, this is a home run. Although the SBA space is still beset bad memories of a slow, bureaucratic, ineffective, paper-intensive process, there has been a demonstrable improvements. Turn times are better and processes are more streamlined .
More than $ 17 billion in 504/CDC loans were made by SBA lenders and banks . These loans have a major impact on the local economy’s ecosystem. This marks the first major change to the program in more than thirty years. 10-and 20-year terms on 504 loans have been available to small businesses since 1986.
The primary goal of SBA in extending the 504/CDC terms were to bring the payment structure more in line with 25-year commercial mortgages.William Manger, Associate Administrator for the SBA’s Office of Capital Access, said, “By extending the payment cycle by 60 months, SBA expects that the new instrument will decrease the monthly payments for the small business borrower and will provide flexibility for small businesses to better manage critical operating capital.”
Corey Rockafeler | With SBA loan terms and pricing among the best in America, it is time small businesses add the SBA 504/CDC to its menu of preferred financing options.